Strengthening State and Local Government Finances: Lessons for Negotiating Public Pension Plan Reforms
The 2008 stock market downturn and subsequent recession forced many state and local governments to assess and reform their pension plans to achieve fiscal sustainability. This report looks at how three statewide plans and two local government plans have gone about achieving that goal.
The findings offer lessons for other reform-minded governments, reinforcing the fact that real change takes years to bear fruit and requires careful planning, good communication, and a strong board. Some key findings include:
- Pensions should be viewed as part of a broader human resources strategy that can affect recruitment and retention.
- Policy makers need high quality data and analyses as they consider benefit changes.
- Strong communication with all stakeholders helps employees, elected officials, and the public understand the need for change.
- Discipline in funding a plan’s annual required contribution is important to achieve full funding.
- Workplace financial education will help public employees learn how to build their retirement savings.
View June 2012 update.